Wells bundles in unlimited human advice with its robo-adviser

The move into robo-advice puts the bank in a space to compete with both startups and other incumbents, with the goal to reach those who still trust a human over a robot.

Suman Bhattacharyya | November 07, 2017

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While robo-advisers like Betterment, Ellevest and Wealthsimple are getting into human advice, Wells Fargo is getting into the robo game, offering unlimited human advice to boot.

On Monday, the bank launched Intuitive Investor, a hybrid robo-adviser, one which lets customers access a real person on the phone for no additional charge. It’s a way an established player like Wells Fargo can carve out a bigger piece of the market, including digitally savvy Gen X-ers who value the support of a human.

“What makes Intuitive Investor stand apart from the competition is the convenience and simplicity of the online experience, the ability to provide access to human advice to every user who needs it, and the chance to help millions of clients that already do business with Wells Fargo best manage their overall financial lives,” said Eddie Queen, head of digital and automated investing at Wells Fargo Advisors, in a statement. The robo-adviser was developed by SigFig.

Customers need to invest at least $10,000 to be able to use the service, and at a 0.5 percent annual advisory fee, it’s priced to compete with other robo-advisers on the market. Customers who link premium Portfolio checking accounts get a 0.1 percent discount, and the service is accessible within Wells Fargo’s mobile banking product with single sign-on.

Among the reasons for the move into robo-advice are changing demographics and evolving investor preferences, the bank said. As baby boomers retire and the concentration of wealth moves into the hands of younger consumers, conditions have become ripe for a digital product offering. But in addition to the robo-adviser, Wells feels it has an edge over the competition due to its “legacy of powerful, high-impact financial advice,” said Jon Weiss, head of Wealth and Investment Management at Wells Fargo in a recent interview.

In a crowded market for digital advice on investments, the $10,000 minimum is indicative of the target market segment, said one analyst.

“The hybrid [advice offering] is more to do with size — the amount of money the client has,” said Aite Group Senior Analyst Denise Valentine. “If you have more money, you want a higher-touch product, you want someone to consult with, but if you have limited resources, you’ll go with Wealthfront or Betterment.”

So, in other words, the market is big enough to accommodate customers of varying income categories. But Valentine said even at a $10,000 minimum, it’s still a broad swath of the “mass affluent” population that the bank is after, and adding robo-advice is almost a given in a competitive space where other big incumbents like Charles Schwab and Merrill Lynch have their own robo-advisers.

But Wells Fargo’s specific reference to Gen X as a target may also give clues to where it’s aiming to gain market share — a demographic where long-established brands have more sway. According to recent research, while millennials are more comfortable with newer brands, older customers are more likely to go with “established brands with proven track records.” And despite the recent proliferation of digital advice, more than two thirds of Gen X and Baby Boomers polled by Allianz last year said they preferred personal relationships over robo-advice.

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